Goldman Sachs experts warn that the performances of previous cycles should not be extrapolated to make price predictions. Therefore, they consider that the cyclical movement is not consistent.
For cryptocurrency enthusiasts, the quadrennial circular movements of the BTC price are unquestionable. According to this theory, the halving is the center of gravity of the entire market. In that sense, once the cut occurs, a powerful upward trend begins, which establishes new all-time highs.
Once that point is reached, a collapse of great magnitude begins that takes prices to scandalous lows. Subsequently, a period of stagnation occurs until the arrival of the next halving, from which the new bull-run begins.
This cyclical movement is constantly repeated and allows investors to have an almost exact idea of the accumulation and liquidation periods. However, Goldman Sachs questions the total capital security if it operates under the parameters of this theory.
Bitcoin Halving Transcendental for Prices
There are just a few hours left until the fourth halving phase in history takes place in the Bitcoin network. For Goldman strategists, investors must carefully assume the bullish strategy after the cut. In this sense, they emphasize that macroeconomic and geopolitical conditions predominate over technical theories.
In a recent note cited by CoinDesk, experts comment on the following:
“Historically, the three previous halvings were accompanied by subsequent BTC price surges, although the approximate price to reach the all-time highs differs. Care should be taken not to extrapolate past cycles and the impact of the halving, given the respective prevailing macroeconomic conditions “
The experts of this lender consider that 100% compliance with the cycle in past editions is no guarantee. Any macro event can easily disrupt this cycle. If investors are betting everything that the cycle will be fulfilled again, then they could experience enormous disappointment in any upheaval.
This would not be a black swan theory, but facts that are perfectly within the possibilities. Among the events that could nullify the bullish trend after the Bitcoin halving could be a very possible resumption of the bullish trend in inflation in the US. According to experts, a worsening in the coming months should not be ruled out.
In the event of a revival of inflation, the Federal Reserve would be forced to return to hawkish policy. In the worst case scenario, interest rates could rise to 6.5%. The result could be a recession, accompanied by further declines in equity and related assets such as Bitcoin.
Bitcoin Price Continues Bearish Trend
About 24 hours remain until the halving in the Bitcoin network and the price of the currency remains in the red. Although the halving has notably bullish qualities, they do not manifest themselves in the short term. According to historical data from previous halvings, the bullish reaction occurs about 12 months after the cut.
Geopolitical conditions heightened investors’ nervousness and that is just one of the selling pressure factors. Another event to take into account is the persistent inflation in the United States. Other factors such as the possible massive sell-off by miners after the cut should be kept on the radar. The possibilities of an escalation in the Middle East conflict are still high and the current tense calm could be seen as a prelude to something worse.
There are other factors that must also be added to this equation. As reported by the Financial Times, the IMF warned that the enormous fiscal deficit of the United States becomes a serious threat to the global economy.
By Audy Castaneda
